Ginn Sur Mer Hit with another Lawsuit as Construction Activity Continues
Multi-billion dollar Bahamas project is the only place showing construction progress in the GINNdom. New lawsuit alleges appraisal fraud.
Palm Coast, Florida – June 18, 2009 – In a recent NY Times business news article, Bobby Ginn said he faced thirty lawsuits. Add another to the list. A suit was filed June 9th in the U.S. District Court for the Middle District of Florida alleging a scheme to generate false loan applications and to create false and artificial appraised values for Versailles Sur Mer (Ginn Sur Mer) lots. Meanwhile, Ginn’s multi-billion dollar Bahamas project is the only Ginn-LA property showing significant construction progress.
Ginn Sur Mer is one of four Ginn-LA properties of which portions were encumbered by a defaulted $675 million Credit Suisse credit facility. As a result of the default, Ginn was required to dispose of the other three properties. The company disclosed at that time that Ginn-LA and lenders would form a joint venture to continue development in the Bahamas. Negotiations are ongoing over the resolution of Ginn Sur Mer. Bobby Ginn is rumored to be seeking other financing to buy out the project.The latest lawsuit was filed by Dana Ballinger, the same attorney who filed a suit in December against Ginn-LA West End, Limited and others alleging several violations of the Interstate Land Sales Full Disclosure Act (ILSA). [Click for a copy of that suit] Ballinger purchased and owns a lot in Ginn Sur Mer. The latest suit names the following defendants:
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Ginn Financial Services
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Bahamas Sales Associate, LLC
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Ginn-LA West End Limited
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The Ginn Companies, LLC
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Ginn Development Company, LLC
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Robert F. Masters II
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Edward R. Ginn, III (Bobby Ginn)
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William McCracken
The suit alleges the defendants conspired in a scheme to generate false loan applications and create false and artificial appraised values for VSM (Ginn Sur Mer) Lots. It also alleges RICO and mail and wire fraud violations. Full 31-page suit
Meanwhile, construction activity continues at Ginn Sur Mer. Through an agreement with the Bahamian Government, a multi-million dollar escrow account was established to ensure the completion of the projects infrastructure (roads, canals, water, and sewer) and one of the two planned golf courses. Canals have been dug to create dock sites. The canal fill was used to raise all building lots approximately 10 feet and provide elevation for the golf courses. The main canal access to the ocean is complete, as are the roads in the Coquile subdivision along the coast line. The first golf course has been mostly sculpted (picture at right) and soil is being brought in. What happens next depends on the results of Ginn-LA’s negotiations with the Credit Suisse lenders, credit availability, and market conditions. There is currently no funding to take any of the project vertical.
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